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Australia to replace carbon tax with ETS

0 Comment(s)Print E-mail Xinhua, July 16, 2013
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Australia will terminate the carbon tax and switch to an emissions trading scheme (ETS) with floating price system from July 1 next financial year, Prime Minister Kevin Rudd announced on Tuesday.

According to this decision, the Australian government will move from a fixed carbon price of 24.15 AU dollars (almost 21.94 U.S. dollars) a tonne to a floating price of about 6 AU dollars (almost 5.45 U.S. dollars) by July 2014.

Speaking at a press conference in Townsville, Queensland, Rudd said that terminating the carbon tax will cost the budget 3.8 billion AU dollars (almost 3.45 billion U.S. dollars) over the next four years. According to him, it will save an average family 380 AU dollars (almost 345.25 U.S. dollars) a year.

Australian households would continue to receive financial assistance but handouts to affected businesses would be cut when Australia moves to a floating price emission trading scheme next year.

"The nation's 370 biggest polluters will continue to pay for their carbon pollution but the cost will be reduced meaning less pressure on consumers," Kevin Rudd said. And this ETS will "boost business competitiveness which will aid the transition from the mining investment boom toward a situation of more broad-based growth", he said in a statement.

The government will make up for the lost revenue through savings, including 1.8 billion AU dollars (almost 1.64 billion U.S. dollars) from changes to fringe benefits tax arrangements relating to employer-provided cars.

Treasury modeling showed moving to a floating rate a year ahead of schedule will ease the cost of living by 7.20 AU dollars ( almost 6.54 U.S. dollars) a week per family. The impact will be greatest on electricity and gas bills.

This move is expected to save the average household around 3 AU dollars (almost 2.73 U.S. dollars) a week, or over 150 AU dollars (almost 136.3 U.S. dollars) in the year, on its electricity bills and around 1.10 AU dollars (almost 0.99 U.S. dollars) per week, or 57 AU dollars (almost 51.79 U.S. dollars) over the year, on its gas bills.

The Australian government will continue to "maintain strong policies" alongside the emissions trading scheme to drive clean investment through the Renewable Energy Target, the Clean Energy Finance Corporation and the Australian Renewable Energy Agency, a statement from Prime Minister said.

Climate Change Minister Mark Butler also confirmed that the government's renewable energy programs would be "absolutely untouched" by the saving measures. Renewable energy sources such as solar and wind were "utterly central to the program to combat climate change", he said.

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